The Bank of Mum and Dad: A Lifeline for First-Time Buyers in a Challenging Market

As a first-time buyer, getting onto the housing ladder can be a daunting task. With rising mortgage rates and a more stringent mortgage market, it’s no wonder that many are turning to the Bank of Mum and Dad for support. According to recent research by Savills, more than half of mortgaged first-time buyers received assistance from family members in 2023, the highest proportion since 2012.

The Bank of Mum and Dad is a vital source of support for many first-time buyers

This trend is not surprising, given the current state of the mortgage market. With lenders favouring less risky, lower loan-to-value (LTV) mortgage lending, it’s becoming increasingly difficult for first-time buyers to secure a mortgage without some form of assistance. As Frances McDonald, director of residential research at Savills, notes, “those who have the option of family support and are secure in their employment will find it much easier to get onto the housing ladder.”

First-time buyers are facing a challenging market, but family support can make all the difference

So, what does this mean for the future of the housing market? While the number of assisted buyers is expected to remain steady, the proportion of first-time buyers receiving support is forecast to decrease from 57% in 2023 to 54% in 2024. This is largely due to the expected decrease in mortgage rates, which will make it easier for buyers to secure a mortgage without assistance.

Mortgage rates are expected to decrease, making it easier for buyers to secure a mortgage

However, it’s worth noting that the total contribution towards first-time buyer purchases will remain in line with 2023 levels, at £9.3 billion. This suggests that while the proportion of assisted buyers may be decreasing, the overall amount of support being provided by the Bank of Mum and Dad is not.

The Bank of Mum and Dad will continue to play a vital role in supporting first-time buyers

As a first-time buyer myself, I can attest to the challenges of getting onto the housing ladder. However, with the support of family members and a bit of perseverance, it is possible to achieve your dream of homeownership. Whether you’re a first-time buyer or a seasoned pro, it’s clear that the Bank of Mum and Dad will continue to play a vital role in supporting buyers in the years to come.

With the right support, first-time buyers can achieve their dream of homeownership